Category: Retirement Plans
Budget Agreement Contains Changes to 401(k) Plan Hardship Distribution Rules
The budget agreement approved by Congress and signed into law on February 9, 2018 includes several changes to the rules governing hardship distributions from 401(k) plans. These changes — which were included in the House version of the tax reform bill, but removed during the reconciliation process — may...
Noteworthy Federal Cases Relating to Employee Benefit Plans in 2017
Here is a round up of cases decided by the U.S. Supreme Court and the First and Second Circuit Courts of Appeals in 2017 involving ERISA employee benefit plans. While courts decided a number of cases pertinent to benefit plans, we found these to be noteworthy: United States Supreme...
Practical Guidance for Required Minimum Distributions and Missing Participants
Retirement plan administrators often run into this problem: a participant has reached his or her required beginning date – the date on which distributions must commence under the required minimum distribution (RMD) rules of Code Section 401(a)(9) – and the participant cannot be located. A recent IRS Field Memorandum...
PODCAST: Ins & Outs of Socially Responsible Investing for Retirement Plans
Verrill Dana employee benefits attorneys Eric Altholz and Chris Lockman discuss the inclusion of socially conscious/socially responsible investment options in 401(k) and 403(b) plans in their latest podcast for Verrill Voices. The podcast explores Department of Labor guidance regarding this category of investments, identified by the DOL as Economically...
PODCAST: 403(b) Plan Fee Litigation Update
Verrill Dana Employee Benefits attorneys Eric Altholz and Chris Lockman provide a brief update on class action lawsuits alleging various breaches of fiduciary duties under ERISA pending against a dozen major universities. All of these lawsuits are related to the administration of the 403(b) plans maintained by the universities...
Restating Your Preapproved Plan Document: Opportunities and Pitfalls
Purveyors of preapproved defined contribution plan documents are now in the process of distributing document restatement packages to employers. The restated documents reflect updates required by changes in law, including the Pension Protection Act of 2006, which previously had been reflected in a series of addenda and amendments to...
2015 Mid-Year Client Advisory
At this time of year many employers finalize welfare plan designs for 2016 and gear up for open enrollment. And this summer, many employers are in the process of reviewing updated pre-approved defined contribution plan documents provided by their record keeping firms. With those efforts in mind, this Client...
EPCRS Revisions: The Second Act
For the second time in under a week the Internal Revenue Service released a series of updates to its most recent restatement of the Employee Plans Compliance Resolution System (EPCRS). Revenue Procedure 2015-28 modifies EPCRS by outlining new safe harbor correction methods for plans with automatic contribution features and...
IRS Clarifies the Correction of Overpayments under EPCRS
The IRS has clarified the correction of certain retirement plan operational failures under its Employer Plan Compliance Resolution System (EPCRS) and expanded certain elements of the program in ways that are helpful to retirement plan sponsors. The clarifications, contained in Rev. Proc. 2015-27 , address what the IRS believes...
When a “Termination” is Not a Termination
Employers grapple with the employee benefits consequences of employment terminations in a variety of contexts. In the retirement plan context when a vested participant's employment ends the most significant consequence typically will be the participant's right to receive a benefit distribution. In most cases – where there is a...
2014 Year-End Employee Benefit Plans Compliance Advisory
The 2014 end-of-year rush seems somewhat less frantic than in years past. Nevertheless, with a month left in the year many employers may find themselves scrambling to meet plan amendment and notice deadlines, and planning for 2015 may still be in process for some. This summary discusses a few...
2014 Mid-Year Compliance Update
While 2014 has been a relatively quiet year in terms of new rules affecting retirement plans, the January 1, 2015 effective date for the Affordable Care Act employer shared responsibility mandate is now in sight. This summary discusses a few key developments regarding employee benefit plans – especially group...
Thirty Years of Church Plan Rulings Challenged
Within the past five months, two federal District Court judges have cast doubt on the validity of IRS letter rulings (and similar DOL opinion letters) issued to church-affiliated employers dating back to 1983. These federal judges – one in California and one in New Jersey – concluded that the...
2013 Year End Benefit Plan Compliance Update and Reminders for Employers
As 2013 draws to a close and we look ahead to 2014, there is no shortage of benefit plan administrative challenges with which employers must contend. While the Patient Protection and Affordable Care Act of 2010 ("ACA") remains very much at the forefront of these challenges, retirement plan and...
Selecting Investment Consultants for Pension Plans With Imperfect Information
An article in the business section of the New York Times last week reported some surprising conclusions reached by a recent study of the performance of pension plan investments. ("Doubts Raised on Value of Investment Consultants to Pensions," September 30, 2013.) The study, performed by two Oxford professors, revealed...
The Sun Capital Case Could Have Broader Implications for Employee Benefit Plans
The widely publicized case of Sun Capital Partners III, L.P. v. New England Teamsters & Trucking Ind. Pension Fund, No. 12-2312, __ F.3d __, 2013 WL 3814984 (1st Cir. July 24, 2013) , has made the private equity investment community a touch uneasy. In holding that a fund organized...
Seasonal Workers and Your Employee Benefit Plans
Summer is fast approaching and we find ourselves answering a number of questions regarding the coverage of seasonal workers in employee benefit plans. For employers planning to ramp up hiring for the summer season we offer this brief review of the treatment of seasonal employees for purposes of your...
2012 Year End Benefit Plan Compliance Checklist and Reminders for Employers
By comparison to past years, the end of 2012 and beginning of 2013 seem not to bring all that much in the way of new legal compliance burdens regarding retirement plans, health plans, and deferred compensation plans. For the most part employers face the continued implementation of changes in...
July 1 Deadline Approaching for Service Provider Disclosures
As all sponsors and fiduciaries of tax-qualified retirement plans should know by now, written fee and expense disclosures are due to be provided to plan fiduciaries by "covered service providers" by July 1. As we explained in a prior post , this important disclosure is mandated by final regulations...
The First Circuit’s DOMA Decision: What It Means for Employers
On May 31, 2012 the U.S. Court of Appeals for the First Circuit, in Massachusetts v. United States Department of Health and Human Services , declared Section 3 of the Defense of Marriage Act (DOMA) unconstitutional. Section 3 defines marriage for purposes of applying all federal statutes as "a...
Participant-Level Fee Disclosure for ERISA and Non-ERISA Plans
After our recent post on the fiduciary-level fee disclosure rules under ERISA Section 408(b)(2), we wanted to complete the picture for plan fiduciaries by revisiting the participant-level fee disclosure rules under ERISA Section 404(a). These rules require fiduciaries of participant-directed individual account plans (such as 401(k) and 403(b) plans...
Plan Fiduciaries Should “Welcome” Final Regulations Regarding Service Provider Disclosures
Last week the U.S. Department of Labor published Final Regulations dealing with service provider disclosures under Section 408(b)(2) of ERISA. This is the latest in a series of regulatory initiatives undertaken by the DOL to ensure that plan fiduciaries, as well as plan participants and beneficiaries, obtain meaningful information...
Three Tips for Cycle A Determination Letter Filers
Happy New Year! The deadline for Cycle A filers (employers with EINs ending in 1 or 6) to submit determination letter applications to the IRS for their tax-qualified retirement plans closes on January 31, 2012. That means that employee benefits lawyers and other professionals all over the country (including...
Unclaimed Benefits and State Escheat Laws
From time to time we are asked whether a plan administrator must report and remit unclaimed plan benefit payments as abandoned or unclaimed property to various states under their escheat and unclaimed property statutes. Clients are usually asking about how to handle uncashed retirement plan benefit checks, and this...
Two Things EPCRS Does Not Tell You About Retroactive Amendments, But You May Want to Know
The Employee Plans Compliance Resolution System (EPCRS) is the IRS' comprehensive correction system for tax-qualified retirement plans, currently set forth in Rev. Proc. 2008-50 (we expect a new EPCRS Rev. Proc. to be released in the near future). One correction method under EPCRS allows operational failures to be voluntarily...
IRS Getting Better and Better at Selecting and Auditing Noncompliant Plans
According to a report recently published by the Treasury Department's Inspector General for Tax Administration, the IRS has significantly improved its ability to select noncompliant retirement plans for examination and is achieving greater success results in those examinations. The report describes the methods used by the IRS to identify...
DOL Finalizes (and Adjusts) Delay in Fee Disclosure Rules, Clarifies Quarterly Notice Requirement
Yesterday the DOL's Employee Benefits Security Administration (EBSA) issued a final rule delaying the applicability dates of the new fiduciary and participant fee disclosure rules. This final rule extends the effective date of the new fiduciary-level fee disclosure rules under ERISA Section 408(b)(2) from July 16, 2011 to April...
IRS Swamped by EPCRS Applications: The Price of Popularity
The IRS Employee Plans Compliance Resolution System (EPCRS) has been a true success story for the Service and for plan sponsors. Under EPCRS, a plan sponsor may voluntarily correct a wide variety of errors made in the administration or drafting of a tax-qualified retirement plan, with a more limited...
DOL Officially Proposes Delay in Application of Fiduciary Fee Disclosure Rules
The DOL's Employee Benefits Security Administration (EBSA) has finally provided official notice of its proposal to delay the applicability date of the new fiduciary fee disclosure rules under ERISA Section 408(b)(2), from July 16, 2011 to January 1, 2012. Although EBSA announced its intention to propose this delay back...
IRS Launches Universal Availability Rule Compliance Project
The IRS Employee Plans Compliance Unit (EPCU) has kicked off its long awaited compliance initiative focusing on how higher education organizations apply the "universal availability rule" to their 403(b) plans . As we've explained in a prior post , under the universal availability rule if a 403(b) plan permits...
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